Of the 13 million yearly fractures that occur in the United States, about 10% fail to repair and in extreme cases this can result in immobility or amputation. While autologous bone grafts are the most effective method to heal complex defects, the available graft material is limited, and the procedure involves additional surgery known to cause chronic donor-site pain in many patients. Human mesenchymal stem cells (hMSCs) have been intensely investigated for their ability to promote bone healing, but results have been variable and disappointing. This is partly due to variability in cell preparations that occurs through donor variation or through inconsistent culture methodologies. Our work has also indicated that hMSCs are not retained at the site of injury for sufficient time to achieve engraftment and promote repair. In an attempt to solve these problems, we recently demonstrated that acceleration of canonical Wnt signaling with the small molecule PPAR? inhibitor GW9662 produces osteogenically enhanced hMSCs (OEhMSCs). Further, these OEhMSCs produce extracellular matrix (hMatrix) that dramatically increases OEhMSC retention and bone repair in calvarial and femoral defects. Our central hypothesis for this proposal is that an injectable microsphere vehicle co-administering GW9662, hMatrix and hMSCs will promote osteo- repair through a mechanism that involves extended hMSC retention, trophic factor secretion and paracrine activation of the host stroma. Our hypothesis will be tested via three Specific Aims. Aim 1: Optimize the delivery of OEhMSCs, hMatrix and GW9662 via collagen/poly (lactide-co-glycolide) capsules in vitro. Aim 2: Evaluate bone repair in immune-compromised murine models of calvarial and femoral trauma. Aim 3: Delineate the mechanisms by which the hMatrix components collagen types VI and XII and their cognate integrins increase OEhMSC retention and expression of osteoinductive and angiogenic paracrine factors. These studies will lay the groundwork for translating this novel hMSC-based method for osteo-repair to the clinic. Successful completion of this project could lead to a revolutionary new method for bone repair that could effectively dismiss the need for autologus bone graft in regenerative orthopedics. Our multi-disciplinary team of stem cell biologists, biochemists, bioengineers, orthopedic clinicians and commercialization experts are highly equipped to achieve the goals of the project.